* Russian gas deal, Gaza ceasefire ease supply concerns
* World oil demand expected to fall in 2009
* U.S. holiday leads to low trading volumes
(Updates prices, detail)
By Christopher Johnson
LONDON, Jan 19 (Reuters) - Oil fell more than $2 towards $34
a barrel on Monday as signs of a resolution of a gas row between
Russia and Ukraine and after a ceasefire between Israel and
Hamas in Gaza eased supply concerns.
The market remained under pressure from expectations the
weakening global economy would erode oil demand. The
International Energy Agency and other forecasters cut their 2009
demand forecasts last week.
"Right now the economy is dominating," said Harry
Tchilinguirian, analyst at BNP Paribas. "The market is very
volatile and the signs are that demand is weakening."
U.S. crude oil futures <CLc1> for February delivery dipped
to a low of $34.08, down $2.43, before recovering to trade
around $34.25 by 1517 GMT.
Traders said the February U.S. crude oil futures contract,
which expires on Tuesday, also fell because of very high stocks
at the delivery point for the U.S. futures contract.
Only just over 2,600 lots were traded on the February U.S.
crude contract. The March contract was much more active as more
than 21,000 lots changed hands.
London Brent crude for March <LCOc1> fell to a low of
$44.20, down $2.37, before edging up to $44.30.
Russia and Ukraine were aiming to sign an agreement on
Monday to restart gas flows to Europe through Ukraine after
finally agreeing a price for 2009 supplies.
Also easing concern about energy supplies, Israeli forces
began to pull out of the Gaza Strip following a tentative truce
with Hamas after the three-week war, easing tension in a region
which pumps about a third of the world's oil.
Prices came under pressure on Friday after the IEA, an
adviser to industrialised countries, joined the ranks of
forecasters predicting a fall in world oil demand in 2009.
OPEC, the oil exporters' group, has cut production three
times since September to try to stem falling prices. It might
consider reducing output again, Algeria's oil minister Chakib
Khelil said on Saturday.
Oil has collapsed by more than $110 a barrel since reaching
a record high of $147.27 a barrel in the summer as the global
economic slowdown has eroded demand and consumer spending.
Still, some in the oil market think there is little room for
prices to fall much further.
"It looks as if Brent will hold in the current $40-$50
range," said Christopher Bellew, a broker at Bache Commodities.
"I do not anticipate new lows."
(Additional reporting by Alex Lawler in London and Maryelle
Demongeot in Singapore; editing by Peg Mackey)
